Condo tower developer seeks delay of $10M payment to City of Vancouver

Luxury condo tower developer asking delay of $10 million payment to City of Vancouver

2021 artistic rendering of 1616-1698 West Georgia Street, Vancouver. (Kohn Pederson Fox/Chris Dikeakos Architects/Anthem Properties)

Anthem Properties is seeking a “one-off” deferral of the remaining payment of what it owes to the City of Vancouver in exchange for the rezoning approval for a new luxury condominium tower in downtown Vancouver.

The previous makeup of Vancouver City Council approved the developer’s rezoning application to build a 33-storey luxury condominium tower with 127 units at 1616-1698 West Georgia Street on the border of Coal Harbour and the West End.

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This site at the southeast corner of the intersection of West Georgia Street and Bidwell Street was previously a Chevron gas station.

So far, Anthem Properties has paid $15.66 million of the $26.1 million in cash community amenity contributions (CACs) it previously agreed to provide to the municipal government as a condition of rezoning and the added market residential density uses.

This aligns with the City’s CACs policy of requiring developers to pay 60% of the cash CACs upfront before the enactment of the rezoning bylaw, which is a step that occurs after City Council’s rezoning application approval.

The remaining 40% of the cash CACs is typically due before the first building permit is issued or 24 months after the date of enactment of the rezoning bylaw, whichever comes first.

The Chevron gas station at 1616-1698 West Georgia Street was closed and demolished in 2017, shortly after it was acquired by Anthem Properties. The site has been sitting vacant ever since. (Daily Hive)

Site of 1616-1698 West Georgia Street, Vancouver. (Kohn Pederson Fox/Chris Dikeakos Architects/Anthem Properties)

2021 artistic rendering of 1616-1698 West Georgia Street, Vancouver. (Kohn Pederson Fox/Chris Dikeakos Architects/Anthem Properties)

Anthem is looking to modify the schedule of the remaining 40%, worth $10.44 million, to the second stage of the building permit.

The first stage building permit generally refers to excavation and shoring of the site, while the second stage building permit generally refers to the site works from foundations to street level.

This comes at a time when new condominium and rental housing projects are increasingly facing viability issues.

According to City staff, Anthem is requesting a change in the payment timeline due to economic challenges, and rampant inflation in construction costs.

“The applicant has advised that this request is being made due to market uncertainty from recent interest rate increases, coupled with unprecedented increases in hard costs,” reads a City staff report.

As well, there is currently lower market demand for upscale multi-family strata residential properties.

2021 artistic rendering of 1616-1698 West Georgia Street, Vancouver. (Kohn Pederson Fox/Chris Dikeakos Architects/Anthem Properties)

Model of 1616-1698 West Georgia Street, Vancouver. (Kohn Pederson Fox/Chris Dikeakos Architects/Anthem Properties)

2021 artistic rendering of 1616-1698 West Georgia Street, in relation to future developments in the area. (Kohn Pederson Fox/Chris Dikeakos Architects/Anthem Properties)

Last month, in a separate matter relating to how rezoning applications will be temporarily prioritized for review, City planners also told City Council that they have seen a surge in Policy Enquiry Process applications from developers and their consultants seeking City input on revised applications to make the pro forma on their projects work. This includes requests to add more density and/or pivot at least a portion of the condominium space to rental housing.

The City’s CACs policy allows for the consideration of deferrals for a portion of cash CACs, such as what is being requested by Anthem. In their report, City staff state the City’s Risk Management Committee has evaluated the deferral request, and is recommending City Council to approve the modification in the agreement allowing for a delay.

Over the years, the City has preferred luxury condominium tower projects in and around the West End/Coal Harbour border for the purpose of generating significant CACs to help fund the West End Plan’s public benefits strategy, which includes major projects such as a new replacement West End Community Centre and Library on Denman Street, and a new replacement Vancouver Aquatic Centre.

In 2018, Daily Hive Urbanized reported the cancellation of a 42-storey, 276-unit rental housing tower proposal at 1640-1650 Alberni Street — just across the street from Anthem’s gas station site — due to a disagreement between local developer Hollyburn Properties and the City over the CACs.

Hollyburn then sold the site to Landa Global Properties and Asia Standard Americas, which submitted a new mixed-use proposal for a 43-storey tower — designed by the Burj Khalifa’s architect — with 198 luxury condominium units, 66 replacement rental housing units, and three levels of office space. Landa Global and Asia Standard Americas saw their rezoning application approved in 2021, in exchange for the promise of nearly $33 million in cash CACs to the City.

“The City decided that the highest and best value for the property would be to build luxury condominiums,” a Hollyburn spokesperson previously told Daily Hive Urbanized. “When it came down to the numbers, it was best for us to sell the property instead of rezoning and redeveloping it ourselves.”

Vancouver City Council is expected to consider Anthem’s request next week.

In 2017, Daily Hive Urbanized reported Anthem acquired the gas station property in a deal worth $72 million, at a time when Chevron was disposing a number of its major properties across Vancouver.

City staff are also still in the process of reviewing and negotiating the CACs for the rezoning application of the two-tower condominium redevelopment proposal on the former White Spot restaurant site, immediately east of the gas station site.

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